There is an irony in watching Prior Consultancy and its favourite talking head, Nigel Green, flail their way through the economic news cycle. One week, they demand bolder interest rate cuts “to match the scale of the threat.” The next, they recoil in dismay when inflation ticks upward and the pound gains strength, declaring that the Bank of England may have “moved too early.” A child toggling the thermostat on a broken boiler could show more consistency than this.

The problem is not that Mr Green is occasionally wrong. That is inevitable in finance. The problem is that his whole analysis—reflected in both press releases—is built on a foundation of intellectual sand. It presumes that the government, through its central bank, can create prosperity by manipulating the price of money. One week the emphasis is on stimulating demand; the next, it is on restoring confidence. But the principle never changes: pull a lever, and the economy will deliver. It is precisely this delusion, shared across the financial consultancy class, that has led Britain to its present malaise.

Nigel Green now warns that the Bank of England’s recent rate cut “looks increasingly difficult to defend.” He claims that “slashing rates just as inflation reignites sends conflicting signals.” But whose signals are truly incoherent? It was Green who, barely seven days ago, castigated the Bank for not slashing rates more aggressively. At that time, he spoke of “a clear destination”—an interest rate of 3.5%—and accused the Bank of taking “the longest road to get there.” Now, he asks whether the Bank has lost the plot.

It hasn’t. But Prior Consultancy has.

Let’s try to untangle the logical chaos. According to Green:

• Lowering rates shows leadership—until inflation rises, at which point it shows naivety.
• Households need urgent relief—but when inflation wipes out that relief, it’s the Bank’s fault for not being clairvoyant.
• Monetary policy should be bold—but only if boldness doesn’t contradict next month’s data.

This isn’t economic analysis. It’s reactive marketing. One begins to suspect that the target audience here is not policymakers or scholars, but jittery clients in deVere Group’s investment portfolios who need to be reassured that someone, somewhere, is “watching the situation.”

Behind all this intellectual fog lies a consistent—and consistently wrong—assumption: that wealth is a product of demand, and demand is a product of credit. In this worldview, the job of the Bank of England is to inject confidence into the economy by cutting rates and “unlocking lending.” The physical world of labour, raw materials, and enterprise barely features.

But reality does not obey the spreadsheet models of Mayfair’s consultancy firms. Interest rates are not a policy instrument to dial up or down depending on sentiment. They are the price of time—specifically, the price of deferring consumption. When central banks suppress that price, they falsify the most important signal in a market economy. Malinvestment follows. Capital is misallocated. Speculative bubbles inflate. And inflation—yes, Mr Green—is the inevitable result.

When prices rise, it is not because the universe is capricious. It is because you pumped the system full of cheap money and expected no consequences. That the very same people who demanded this monetary flood now complain about soggy carpets would be insulting if it were not funny. On reflection, it is both.

Look again at the words used in both releases: “urgent,” “bold,” “leadership,” “conviction.” All of them suggest that monetary policy is not a discipline of constraint, but a performance of action. It is not what you do, but how dramatically you do it. In such a framework, to hold interest rates steady—i.e. to refrain from distortion—is seen as passive, cowardly, even irresponsible.

This is backwards. The truly responsible policy is the one that interferes least with the workings of the market. And the first step toward that is to abolish the fantasy that money can be created without cost. Every pound printed is a pound diluted from the existing stock. Every basis point cut without real savings behind it is a theft from those who saved honestly.

What Mr Green calls “stimulus” is just a transfer—from savers to borrowers, from the real economy to the City, from the future to the present. It is short-termism raised to the level of religion.

The real solution lies where no one in Whitehall or Canary Wharf wants to look: in a return to sound money. That means ending discretionary rate setting. That means anchoring the currency to something real—ideally a defined weight of gold—and ending the pretence that policymakers can outguess the market.

The Bank of England, for all its faults, at least waited to cut rates until inflation had fallen below 3%. For this, it was excoriated by Prior Consultancy as timid. Now that inflation has edged back up—due, incidentally, not to monetary policy but to taxation and regulatory distortions—these same people wring their hands and cry betrayal.

It is hard to know what they want. But one thing is clear: they want it at someone else’s expense.

What emerges from these two releases is not just a confusion of analysis, but a confession of failure. The modern financial consultancy industry, bloated with jargon and addicted to government intervention, has nothing useful to offer. It reacts to data but understands nothing. It demands action but accepts no responsibility. And it plays at economics while looting the credibility of the institutions it pretends to advise.

The pound has risen. Inflation has too. This is not a paradox—it is the natural consequence of years of bad policy and worse thinking. That the same people responsible for this mess now offer to fix it should be a source of dark amusement, if not outright contempt.

Nigel Green ends his second release by claiming that the Bank “must now demonstrate it hasn’t lost the plot.” No, Mr Green. The Bank may be muddled—but it is your plot that was never coherent to begin with.

The release:

Pound climbs as inflation surprises — BoE’s cut under fire

-FOR IMMEDIATE RELEASE-

May 21 2025

Sterling rose 0.4% against the dollar after the UK’s annual inflation rate unexpectedly accelerated to 3.5% in April, defying forecasts of a continued decline and casting immediate doubt on the Bank of England’s recent rate cut.

Core inflation also moved higher, climbing to 3.8%, underscoring the persistent strength of price pressures in key areas of the economy.

The central bank’s decision to lower rates has now collided with resurgent inflation data, triggering concern among investors and businesses that the policy shift was premature.

“The pound’s reaction was swift—a clear signal that markets are reassessing UK risk exposure in light of the data,” says Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory and asset management organizations.

“This move from the Bank looks increasingly difficult to defend.

“Slashing rates just as inflation reignites sends conflicting signals and risks making conditions worse for the very households and businesses it’s trying to support.”

April’s figures interrupt what had looked like a steady deceleration. After falling to 2.6% in March, inflation was widely expected to continue easing.

Instead, energy costs, the rise in the domestic business tax, and seasonal adjustments from transport and leisure all pushed the rate higher again.

Crucially, the pressures were not isolated; core inflation’s rise suggests underlying momentum that policymakers can’t ignore.

The deVere CEO says: “For millions of households, this marks yet another setback. Despite some mortgage relief from the rate cut, any gains are being eroded by rising food bills, higher transport costs and elevated rents.

“Energy remains a burden, especially for lower-income families who had expected real relief heading into the summer.

“This disconnect weakens confidence and risks deepening the sense of economic instability.”

Businesses face similar complications. SMEs in particular are navigating unstable input costs and shifting wage expectations, while also trying to respond to unpredictable demand.

“The cost of inaction is high—but so is the cost of miscalculation. The central bank’s credibility matters, and if it looks like it moved too early, it may lose the trust of the private sector it’s meant to support.”

For global investors, the picture is equally complex.

“Gilts are now under scrutiny. Equities, previously buoyed by hopes of lower borrowing costs, may now face volatility as markets reassess inflation-linked earnings risk. The FTSE had been positioned as a value opportunity—but that view may not hold if inflation forces policy reversal,” notes Nigel Green.

“This development lands in a global environment where investors are already watching for signs of divergence between central banks,” he adds.

“The BoE’s decision stands in stark contrast to the Federal Reserve’s more cautious stance. The divergence could reshape flows, particularly in FX and fixed income.”

Chancellor Rachel Reeves admitted disappointment in the numbers. But disappointment doesn’t change the fact that the UK economy now sits in a zone of heightened uncertainty, where inflation is no longer drifting downwards and monetary policy is loosening.

Nigel Green continues: “Unless May’s figures show a sharp reversal, the BoE may have to pause further cuts—or face the much harder decision of reversing course entirely. The window for a soft landing is narrowing.

“Sterling’s rebound reflects more than a one-off reaction to inflation data—it signals unease. Investors are asking whether the BoE moved with enough conviction and whether it truly has control of the inflation trajectory.”

He concludes: “Monetary policy needs precision. The Bank of England must now demonstrate that it hasn’t lost the plot, and that it still has the tools and the resolve to restore price stability.”

-ENDS-

e: george@priorconsultancy.co.uk

t: +44 207 1220 925

Twitter: @PriorConsults

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of offices around the world, more than 80,000 clients, and $14bn under advisement.